The Governing Council would like to take this opportunity to provide an update on Shambhala Mountain Center.

We know that for some time there have been concerns about Shambhala Mountain Center’s financial health, which have led to confusion, doubt and uncertainty. With this update, we wish to share some of the important strides that are being made, as well as make manifest our shared commitment to introduce appropriate remedies. These positive efforts will bring meaningful change to enable Shambhala Mountain Center to not merely get by, but to thrive.

To that end, the Governing Council is implementing a three- to four-year turnaround plan intended to ensure that Shambhala Mountain Center remains focused on fulfilling its mission and purpose, achieves financial sustainability, and offers the highest quality programs and services. To do so will require sound, innovative and creative management and oversight.

Root Causes of the Financial Issues

Many of today’s financial challenges are a result of decisions or circumstances from years – even decades – ago.

The most challenging of these has been the need to make monthly debt payments to repay major loans that were taken out 10+ years ago. The reason for borrowing money in the first place was to enable the construction of the Rigden and Shambhala Lodges, so that Shambhala Mountain Center could offer programs year-round and meet the needs of program participants who were not able to continue living in tents.

While these buildings have been invaluable additions, and have regularly been filled during significant programs, annually the number of program participants who occupy the lodges has not reached our initial projection. For that reason, large loan payments have been due without the anticipated income to cover them, requiring that Shambhala Mountain Center find alternative sources of revenue and at times, make deep spending cuts.

Other financial challenges involve the aging of facilities that have costly upkeep and maintenance requirements, or which need to be replaced altogether. Many of Shambhala Mountain Center’s buildings are 10, 20, even 30+ years old. One example is the need to put into place a modern water treatment system to accommodate what has become a steady increase in the number of annual program participants over the years.

More recently, the wild fires of two years ago sharply curtailed projected program income during what are normally the peak summer months.

Below: The High Park Fire as seen from SMC

As a result of these events and occurrences, Shambhala Mountain Center needs to identify new ways to generate income and pay-off significant debt. Thus, an approach to operating the Center that may have worked in simpler times and with varying degrees of success over the past 40 years needs to be updated and revamped in order to meet current conditions and future needs.

Current Situation

Despite these challenges, Shambhala Mountain Center has been able to increase operating revenues so that they now cover 96% of our operating expenses (all but $85,000). This means that fundraising income will not be needed solely to cover the costs of operating Shambhala Mountain Center, but importantly, can also be directed to repaying debt and making facilities improvements. There are still challenges such as the seasonal nature of our revenues, and we are working to find alternative revenue streams to provide year-round income, and at the same time, building our traditional sources of revenue to increase our late-fall and winter revenues.

In order to further strengthen Shambhala Mountain Center’s health, a strategic planning process is underway to identify what institutional changes should be made to emerge from this period of financial challenges with a more balanced array of income streams. This plan will also allow us greater financial capacity to invest in our talented staff.

A commitment to operating Shambhala Mountain Center with sound management and governance principles is at the heart of our planning so that this magical, blessed practice environment can serve many future generations. We are applying principles of Shambhala governance and leadership, in combination with organizational development principles, the synergy of which will build an organization that is stable and strong, and one with a strong staff culture and community.

In fact, our serious approach to improving Shambhala Mountain Center’s operations has been a confidence builder with our lending bank, which recently indicated flexibility in working with us to identify ways to fulfill our obligations.

Importance of Adapting

We recognize that the economic environment today is different from when Shambhala Mountain Center was first formed. Today, there is greater competition from other contemplative retreat centers that are attracting individuals and groups who otherwise might choose to come to Shambhala Mountain Center.

Therefore, it is vital that we be creative, smart, and able to adapt to the times. For example, just as other institutions have integrated online learning to complement their on-site training and instruction, so Shambhala Mountain Center is launching a series of web-based conferences and courses featuring high-draw speakers from within and beyond the Shambhala community. This approach will also build a revenue stream that is neither seasonal nor location dependent.

Shambhala Mountain Center’s financial statements have been audited by an independent CPA firm for the past decade. Stronger internal financial controls, reporting and oversight have been put into place so that the Center can more accurately anticipate financial needs and find appropriate solutions, rather than respond reactively to difficulties once they have already begun.

Developing revenue from rental fees will be an ongoing focus. Shambhala Mountain Center has a growing track record of securing agreements with community and other organizations to bring them to the land for their own retreats and programs. We see this as an important area for future growth.

We are analyzing the best mix of programs that we can offer, with a growing emphasis on replacing the shorter weekend programs with larger and longer programs. In many ways, Shambhala Mountain Center carries similar costs for operating a small program for 10 people as it would for a larger program of 100, though there is an obvious difference in revenue between the two programs. Therefore, we need to find the right balance in offering both the accessible smaller programs, and the longer and larger programs that bring in more revenues.

Movement has already begun toward fee-based, online programming so that participants off-land can receive instruction or training, and participate in events and celebrations taking place at the Stupa.

The gift store is also making the transition to adding a robust online component, enabling a much larger store selection of books, supplies, clothing and other items to be available to customers 24/7, 365 days of the year.

New marketing strategies are focusing on ways to leverage social media to create opportunities for greater interaction, which will bolster loyalty, raise awareness and spur charitable giving.

Collaborations are being forged with other organizations to form mutually beneficial partnerships that will help all the partners achieve their respective goals. One example being discussed for 2014 is a fund-raising and awareness-raising project with the Ziji Collective (a multi-generational younger sangha organization) that would lead to an on-land event.

Grant funding for operational and capital needs is being researched and we are applying to private foundations, as well as federal, state and county sources. As an organization incorporated to serve “educational, spiritual, cultural, intellectual, and artistic enrichment,” Shambhala Mountain Center has numerous opportunities to invite prospective funders to support our mission and work. Initial success has been positive and staff expertise is deepening in this relatively new activity for the Center.

Plans for managed growth will be developed so that Shambhala Mountain Center’s sometimes “rustic” facilities can be upgraded and expanded to meet future needs, while still preserving its unique nature as a contemplative retreat center.

We recognize that these important changes and improvements will not be completed overnight. But they are already happening and with the ongoing support and partnership of Shambhala Mountain Center’s friends and donors, we will strive to improve month after month.

Our commitment to greater financial transparency and more open communication with the Shambhala community and other interested parties – funders, programs participants, visitors – will mean regular, informed updates to all of our stakeholders, as well as our actively seeking their input and engagement in support of Shambhala Mountain Center’s ongoing strategic development and growth

In that spirit, if you have further questions or comments at this time, we invite you to address them directly to any member of the Council.

Thanks to our generous donors’ support, we have raised $101,578.61 of our $125,000 goal. Each gift will continue our mission to help people from all over the world experience their own goodness and wisdom.

Though we have come far thanks to the work and generosity of many, we recognize that a major shift is needed to move away from the stress of making ends meet and into a situation where the vision of SMC can flourish.

As you may know, Shambhala Mountain has faced financial challenges for many years, challenges which were exacerbated by a natural disaster and a severe economic recession. A mix of community support, blessings of the Shambhala lineage and other genuine wisdom traditions hosted here, intelligent planning and simple good fortune has made a seemingly impossible situation workable.

Video: SMC in the Beginning

Alex Halpern (above) came to the land that would become Shambhala Mountain Center in 1972. In this video, Alex gives a personal count of Shambhala Mountain Center’s first years.

We recognize that in order to foster long-term financial sustainability we must:

take a realistic look at SMC’s debt and operating expenses

evaluate our array of programs and activities

consider both new and improved opportunities to generate income

To that end, the SMC Governing Council and key staff are working on a Five-Year Strategic Plan. This plan will put us on solid footing to fulfill our mission effectively and meaningfully and will include a holistic approach to the development of SMC, including financial analysis, capital development, clarity and development of program streams as well as professional and community training for the staff.

We will regularly provide updates on the Plan, with the next briefing to be presented before Shambhala Day. We will also be sharing our End of Year Report with donors in early February.

The help and support of our donors have offered through the years has kept our doors open. To those of you who donate to SMC, thank you so much for the essential role you have played in preserving SMC’s sacred land and transformative programming. Shambhala Mountain Center would not exist without you.

Shambhala Mountain Center generally meets 75% of its operating costs through program revenue, rentals and store sales. It relies on fund-raising to cover the rest of those costs, as well as to make payments on the bond that it undertook in order to build the Sacred Studies Hall, Shambhala Lodge and Rigden Lodge. It also relies on fund-raising to build the new water treatment system required by Larimer County. The combination of these three fundraising needs: operations, debt service and the wastewater project – has made the annual fundraising challenge about $1,000,000 per year for the past several years.

2013 was different from recent years in several respects. Funds raised were approximately $400,000. Annual debt service was $300,000 less than usual because we were able to defer some bond payments following the 2012 fire. Early registrations for 2014 brought in $100,000 more than usual. To close the gap for the year we used $150,000 in cash reserves.

Our forecast for 2014 again shows the need to raise about $1,000,000 to cover operations, debt service and the next phase of the waste water project – upgrading the collection system that transports the waste for downtown to the treatment plant. This project work was scheduled to begin in spring 2014 and we are in the process of requesting a six month delay in order to complete the fundraising for this next phase. Shambhala Mountain Center is working on grants to cover part of the project costs.

Last fall Wells Fargo bank, which handles the Shambhala Mountain Center account, asked for a meeting with our Chief Financial Officer, Deben Tobias. Three bank officers were present: a Vice-President from their Denver Credit Management Group, a Vice-President and Loan Adjustor from the Credit Management Group stationed in Fort Collins, and a Business Relationship Manager from the Boulder office.

They acknowledged that our cashflow may not be sufficient to cover operations, the debt service and the next phase of the new water treatment system. The discussion covered a possible re-structuring of the bond and all other debt currently held by Shambhala Mountain Center. They want to avoid seeing us default or go into non-performing loan status. We will continue to explore options with the bank in the coming months.

In parallel with this, Shambhala Mountain Center is trying to build a sense in the community of the cross roads at which they find themselves. Shambhala Mountain Center has been on the edge for years – paying bills with future revenues, no cash reserves, working to resolve non-compliance with building code and wage codes, and so on.

To address these issues the leadership at Shambhala Mountain Center has assembled a team of senior managers and governing council members with operational and financial expertise. The goal is to fundamentally change the culture and professional and business conditions, while carefully managing the way through the next few years, which will continue to be very challenging. We believe our new team makes us better positioned to improve our operating revenue and work towards a more sustainable model for funding operations.

One of the ongoing challenges Shambhala Mountain Center faces is the accumulation of deferred repairs and maintenance. A good example of all this is Shambhala Mountain Center’s kitchen and dining building. The makeshift and partial repairs applied over the years were no longer sufficient and Shambhala Mountain Center needed to redo the roof, insulation, interior ceiling and dishroom floor. The Shambhala Trust very generously funded the work. Each year we will have similar items requiring attention.

One of the questions that gets raised periodically about Shambhala Mountain is this: Are we going bankrupt? The short answer is that the value of the property far exceeds the amount of debt we are carrying, and our net assets (total assets minus loans and liabilities) at the end of 2012 were over $6,000,000. But we do have a considerable challenge to manage our yearly cash flow to ensure that we bring in enough revenue each year to cover operations, debt service, completion of the wastewater project, and required maintenance to the facilities.

If you wish to have more information or want to offer assistance, please contact development@shambhalamountain.org.

The unique setting of SMC has magnetized students and teachers from all over the world. Each weekend, as our program participants arrive, I am reminded that we have a precious, unique and delicate situation at SMC. As part of the SMC community, you have probably experienced the transformative power of SMC’s sacred, untamed land.

Your end of the year gift is essential to preserving SMC as a place for future generations to enjoy and learn.

Though the mountains are rugged and the Stupa well-built, SMC itself relies on your continued support. Your donations bridge the gap between the cost of offering affordable, impactful programs and the money generated by programs.

As we learn into the future, we continue to develop more and better ways to be a support for Shambhala and other genuine wisdom traditions that celebrate and strengthen our understanding of human goodness.

To all of you who have offered support, thank you so much for your generosity!

We had some furry visitors come through the land last week! Here you see them enjoying what is left of the fall foliage in front of facilities manager Mike Dean’s house.

Since becoming SMC’s Executive Director, I have learned a great deal about what it takes to make a place like SMC thrive and there is still so much in this coming year I look forward to exploring. I have a wonderful team of talented and experienced managers as well as a new operational structure that is helping our workloads stay sane.

In the next months, we will be sharing stories from SMC past, present and ways we are learning into the future.

In the video above, Acharya Dan Hessey shares how bravery and generosity are linked in supporting SMC. In addition to being a senior teacher and charismatic guy, Acharya Hessey was an SMC Director in years gone by.
I’m inviting you to invest in the change SMC effects in society as an organization and a retreat center, one person at a time.
As you know, SMC is a unique and precious place, full of natural beauty and limitless potential.

As the Executive Director, I delight in the sense of responsibility for maintaining and developing SMC as a jewel for generations to come, and want to invite all of you to share in this joy.